Smart Retirement Strategies for Couples

9/21/2017

Whether you’re engaged, a newlywed or planning your golden wedding anniversary, your retirement savings should never be an afterthought. Married couples should think and plan for retirement differently than single people do. When you and your spouse plan for retirement together, you can develop a plan so you both can look forward to a more secure retirement.

Start the Conversation

No matter what your retirement dreams entail, whether that means rocking away on the front porch or you plan to continue working in some form, you and your spouse should sit down and discuss your individual retirement dreams. According to NerdWallet.com, just over one-third of Americans report knowing their spouse is saving for retirement, but they don’t necessarily know how much.

Crunching the financial numbers on your retirement dreams can feel daunting or too far away to feel important, but it’s a crucial conversation. Sit down with your spouse today and get an idea of what each of you have saved up in your respective retirement accounts.

How Much Do We Need?

The best way to start determining how much you need in retirement is to use an online calculator. It can give you an estimate of how much you need to accumulate over time to make your dreams a reality. It’s a good idea to refer to a calculator frequently or as you have major life changes that could signal a change in your retirement plans. Your local Farm Bureau agent can give you a more accurate picture of how much you need in retirement.

Saving Together

One common mistake that couples often make is relying on one spouse’s income and retirement savings. While you might find that you comfortably live off one spouse’s income now, it’s important to calculate just how much you might need during your retirement years. If both partners are working outside the home, both should contribute to your separate employer-sponsored retirement accounts. See if it’s possible for both you and your spouse to make the maximum contribution.

Once you and your spouse are able to take full advantage of your employer 401(k) match, you can decide if you want to expand your retirement savings strategy by adding an IRA, Roth IRA or a different financial product to help you and your spouse meet your retirement savings goals. Ready to expand your retirement savings? Your local Farm Bureau agent can help with additional retirement savings products so you and your spouse can maximize your savings.

What if I Stay Home with my Kids?

If you’re a stay-at-home mom or dad, saving for retirement isn’t something you should forgo. Just because you might not have a company matching a 401(k) contribution doesn’t mean you don’t have other options available! Whether you work or stay at home, it’s vital that you secure not just your children’s and spouse’s future, but your own as well.

If you left your nine-to-five employer behind to stay home with your kids, you might’ve left your 401(k) with your old employer too. Consider rolling your funds into an IRA. Consider opening an IRA that will allow you to make contributions. Talk to your local Farm Bureau agent about a spousal IRA. Typically, you need earned income to contribute to an IRA but a spousal IRA allows your spouse to contribute up to $5,5000 to an IRA in your name. A spousal IRA will not only help boost your household retirement account contributions, but it also gives a non-working spouse the chance to build up retirement assets in their name.

Saving When You’re Self Employed

Maybe you run a home-based business. This affords you additional retirement savings opportunities because it allows you to set up an individual 401(k). As with a traditional 401(k), all your contributions are pre-tax dollars. You’re able to contribute up to 25 percent of your business’ total earnings; as an employee, you can also contribute up to an additional $18,000 a year, and those contributions can also be deducted as a business expense. However, the rules for who can open an individual 401(k) are strict, and you’re only eligible if you have no employees.

Don’t Forget to Update Your Beneficiaries

Your beneficiary forms determine who inherits your retirement savings. So, it’s important to make sure that your beneficiary forms are up to date. If you have children, you may also want to name them to ensure your retirement savings pass to them if something were to happen to both you and your spouse.

We’re Here to Help!

When you’re ready to talk retirement strategy, your local Farm Bureau agent can sit down with you to help you get started. Connect with a Farm Bureau agent to get started on a plan today.

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